ICE Canola Up With Soybeans

Winnipeg – Canola contracts on the ICE Futures Canada platform were higher at 10:45 CST Monday, as gains in the CBOT soy complex spilled over to provide support.

“Bean oil is on fire, and canola is getting dragged up as well,” said a canola broker. Weather concerns for the South American soybean crop were also supportive for the oilseeds in general, as excessive moisture in Argentina continues to delay planting operations.

A lack of significant farmer selling, as producers appear content to wait until the New Year to make more sales, added to the firmer tone, according to participants.

Statistics Canada releases its final production estimates of the year on Wednesday, and short-covering ahead of the report was also supportive for canola, said a broker.

In October StatsCan pegged the country’s 2012 canola production at 13.3 million tonnes, which was well below the 14.5 million tonne crop grown in 2011. Most analysts aren’t anticipating a large change from the past report, with general expectations ranging from about 13.0 tonnes to 14.0 million tonnes.

The outside financial markets were starting to weaken as the day progressed, which limited the upside potential in the grains and oilseeds, according to participants.

Technical resistance to the upside was also said to be keeping the gains in check, as the January contract neared the psychological C$600 per tonne level.

At 10:45 CST, about 6,700 canola contracts had changed hands with intermonth spreading a feature of the activity.

Milling wheat, durum, and barley futures were all untraded and unchanged.